New Balance Wearables May Be Step in Wrong Direction

ByElisabeth Rosen ·

7 January 2016

Amid the flurry of products launched at this year’s Consumer Electronics Show, New Balance launched a new division focusing on wearable technologies. The brand plans to launch an Android Wear-powered smartwatch in time for the next holiday season, in addition to creating apparel and footwear with embedded technology.

“Digital technology has truly revolutionized — very quickly — this industry, and New Balance wants to continue to be a brand on the forefront, arming our athletes with the cutting-edge products that will help them reach peak performance,” CEO Rob DeMartini said.

But as New Balance jumps into wearables, top competitors are moving away from them. Despite the popularity of the Nike+ FuelBand, Nike left the wearables market in 2015, broadening its focus to building the Nike+ ecosystem. Similarly, Under Armour moved from selling basic accessories to create UA Record, a proprietary fitness hub combining tracking and social features. The brand launched its first connected fitness product portfolio at CES this week, leveraging UA Record’s capabilities to track a wide set of personal health metrics.

While connected fitness will account for only 5% of Under Armour sales by 2020, establishing such a system can help shape the brand’s image.

“We want to be known as the dashboard of all things health and fitness,” chief digital officer Robin Thurston said at a press briefing last month.

While Under Armour and Nike are pioneers in the area of fitness ecosystems, New Balance’s move into wearables reflects an already crowded market. With most brands struggling to prove that they can add value next to Apple or Google’s products – even category mainstay Fitbit saw its stock plunge this week after revealing its first smartwatch – the Sportswear brand may have a tough time convincing customers to shell out for one more timepiece.

While New Balance exhibits a praiseworthy commitment to digital technology, a better place for investment might be mobile apps. Currently, the brand’s mobile app lags behind offerings from Nike and Adidas, which both place in the top three in L2’s 2015 Digital IQ Index: Sportswear – earning the title of Genius. In contrast, New Balance ranks eighth. Investing in more mobile app features such as e-commerce and gamification could help the brand position itself at the true forefront of digital.